Insider buying increased last week with insiders purchasing $57.84 million of stock compared to $43.89 million in the week prior. Selling more than doubled with insiders selling $1.17 billion of stock last week compared to $563.35 million in the week prior.

Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 20.3. In other words, insiders sold more than 20 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 12.84. Insider Sector Heat Map May 3, 2019 (Source: InsideArbitrage.com database)

Note: As mentioned in the first post in this series, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However, metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.

Chief Executive Officer Michel Vounatsos acquired 4,351 shares, paying $231.48 per share for a total amount of $1.01 million. Mr. Vounatsos increased his stake by 26.12% to 21,007 shares with this purchase.

This is the second time, Dr. Denner purchased shares of Biogen this year and this time the CEO joined him in his purchases. His earlier purchase in February was at an average price of $327.59. The stock declined sharply in March after the company terminated development of its Alzheimer's drug Aducanumab. We wrote the following about the company in February:

While Biogen is up significantly off its spring 2018 lows, which saw the stock dip below $250, the stock is still trading for less than 10 times EBITDA. Revenue continues to grow but the growth is anemic on account of competitive pressure for its multiple sclerosis drugs. Margins and free cash flow are healthy and that probably explains why both the company and Dr. Denner are buying stock.

Dr. Denner started Sarissa Capital Management in 2012 after working as a healthcare portfolio manager at Icahn Capital. As of its Q3 2018 13-F filing, the fund had a concentrated portfolio worth $453.36 million, with more than 36% of its assets in Biogen. The fund also held positions in Innoviva (NASDAQ:INVA) and Allergan (NYSE:AGN). Dr. Denner also serves as the Chairman of the Board at The Medicines Company (NASDAQ:MDCO).

Director Frederick William McNabb acquired 6,430 shares of this health insurance provider, paying $233.21 per share for a total amount of $1.49 million. Mr. McNabb increased his stake by 443.75% to 7,879 shares with this purchase.

Cerner is one of the largest public pure play healthcare information services companies that is nearly 10 to 20 times the size of other players in the Electronic Health Records (EHR) space like Allscripts (NASDAQ:MDRX) and NextGen (NASDAQ:NXGN). This is not because Cerner has 10 to 20 times the revenue of companies like Allscripts and NextGen but because the company is very well run and sports double-digit operating and net margins. At 4 times sales, the company trades inline with other mature software companies and is not being afforded the heady valuation high growth software companies are being given by the market.

P/E: 35.68

Forward P/E: 21.6

Industry P/E: 72.76

P/S: 4.08

Price/Book: 4.34

EV/EBITDA: 18

Market Cap: $22.28B

Avg. Daily Volume: 2,618,172

52 Week Range: $48.78 - $69.34

You can view the full list of purchases from this Insider Buying page.

Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.